Where to find the next sneaker drop? StockX

Sneakerhead: One who is in love with but not limited to Jordans, Forces, Dunks, Maxes, etc.; Willing to camp out and face lines that wind around blocks for a pair of once in a lifetime exclusives; likely to kill you if you step on their kicks

Urban Dictionary

For this post, the most important part of this urban dictionary definition is: “Willing to camp out and face lines that wind around blocks for a pair of once in a lifetime exclusives.” What do you do when you want the kicks, but you’d rather sleep in or buy from the comfort of your own climate-controlled home? Log onto StockX

What is StockX?

StockX is an online marketplace for buying and selling products such as sneakers, streetwear, watches, handbags, and recently, gaming consoles. The current valuation is $3.8 billion following the latest funding round completed at the end of March 2021. In 2020, StockX generated over $400 million in revenue and has poised itself for an IPO later this year.

Source: StockX
Source: StockX

Founded in 2015 by Josh Luber as a way to take his hobby of collecting sneakers and be able to actually profit from it. Luber wanted to build “the stock market of things” and has been able to grow that idea into a global business. The company is headquartered in Detroit, MI.

Now that we have a bit of background on the company let’s pivot away from the equity report format. Why has StockX grown so rapidly and been so successful? It seems like a fairly straightforward idea, someone does the hard job by building a bot for online releases or stands in a line for hours or even days to buy shoes or any of the other things found on the marketplace, and then resells them for a markup. Classic middleman scenario. A tale as old as time. So why does StockX have the magic sauce?

According to quite a few of the articles I read, one magic sauce ingredient is the ease of use or convenience. StockX allows buyers to search thousands of items to find the exact thing they are looking for. They can then buy immediately or try their luck at a bid process. StockX then works to confirm your purchase and gives the seller 2 days to ship the item to a StockX authentication center. StockX authenticates the item and then ships it out to the buyer. Does StockX charge a fee to do all this work so the people on either side of the transaction don’t have to? Of course. Do people really seem to mind? Not so much. The authentication provided by StockX is another ingredient in the magic sauce. Not many other marketplaces authenticated items when StockX burst on the scene, so this helped to really build trust with buyers as they were ensured their purchase was not a scam or a fake.

The last two major ingredients to round out the StockX magic sauce are: data and brand. StockX allows buyers and sellers to track their items through the entire “supply chain.” As a collector, you can track all of your purchases on StockX and also manually add in anything you purchased not on StockX to have a comprehensive list of the items in your collection. StockX consistently tracks market value of items based on marketplace transactions, so you can always see what each one of your items is worth at any given moment. If you’re thinking this sounds very similar to how one may track the value of assets in a portfolio, then you’re on the right track. Many StockX users look at their sneakers as tradeable assets rather than clothing. This point of view would have never gained traction if not for online marketplaces like StockX. Lastly, the StockX name is now synonymous with its global reach and trusted process. StockX has worked to partner with small-businesses and was also involved in Paris Fashion Week a few years ago.

Examples of portfolios currently on StockX

I think we can definitely say that StockX has made a huge impact on the online resell marketplace landscape and will continue to do so as it expands into other products as well as partnering with designers to launch products exclusively through the StockX platform. All of that being said, I think the rise of streetwear within the mainstream fashion industry has also really added to the StockX hype. Sneakers have always been popular, but the extraordinary rise in demand for sought after brands like Jordans has worked to help fuel the exponential growth of StockX.

Sneakerheads in America | Complete Guide | Info | Laced | Trainers

I have never purchased shoes from StockX (did purchase an Xbox Series S to win the best Aunt award at Christmas), but I have stood in line for a release, and I would say that the ease of use and lack of anxiety that comes with purchasing from StockX is well worth the markup (within reason obviously, however it all depends on how much you want it, right?). To quote the great Nelly “Give me two pairs cause I need two pairs.”

Have you ever purchased something from StockX? Was it a super easy transaction? Was is sneakers? If so, which ones?

Sources:

https://www.inc.com/magazine/202002/sheila-marikar/stockx-josh-luber-sneaker-resale-marketplace-scott-cutler-detroit-founder-ceo.html

https://www.cnbc.com/2021/04/08/sneaker-reseller-stockxs-valuation-jumps-to-3point8-billion-.html

https://www.businessinsider.com/how-stockx-works-service-review

10 comments

  1. abigailholler1 · ·

    Thanks for opening my eyes to an online marketplace I did not know existed!! Right around the corner from my apartment is a specialty sneaker store; and every couple weeks or so, we see the line begin to form the night before a big sneaker release. Customers come prepared for a night of waiting, bundled up with their lawn chairs in hand (sometimes in cold weather!). After seeing this, I have to say, StockX sounds like a way better option. I think it’s really unique to think about sneakers (and other streetwear) as an investment, and based on the screenshot of pricing you included above, these investments can hold a ton of value. I think the obvious difference between a collection of sneakers vs. traditional stocks, is that unlike a stock which is representative of a company’s future earnings, these sneakers value is somewhat in the eye of the beholder. Does the owner think the sneaker will be a collectable in future, and thus increase in value? Will the fashion ‘age well’? I think the answer to these questions might be different for everyone taking part in the online marketplace, which I guess is part of the fun!

  2. The sneaker culture phenomenon is quite immense. As Erin had alluded to earlier, the exchange focus of StockX is a unique feature that revolutionized the way that consumers purchased and were able to monetize their collections. What will be interesting is to see if NFT’s some how make there way into sneaker culture. Like if sneaker designers could partner with Beeple and have small digital trinkets attached to Nike Sneakers.

  3. I have a couple of friends who are big into sneakers but I have never heard of them using StockX. It seems like a very efficient way to bring a scarce item to the everyday consumer! I will be interested to see how widespread it goes beyond sneakers. I can understand how it works for something like rare shoes that are in limited numbers at stores. For more common items like computers, I would imagine that many people would rather still go to an electronics store for that.

  4. Great post Andre, I appreciate the Air Force One quote, classic song. In middle school I had a pair of Jordan 18.5’s in Carolina blue that I wore only while playing basketball. I was very excited to see that StockX had a pair on their site. As much as I liked the shoes I won’t be shelling out $350 for them. I really like the idea of the business and know that it has a lot of potential. I like how they have used technology to create a marketplace that would otherwise only exist in neighborhoods. I know the Sneakerhead community is very passionate about their shoes, so as much as $350 is out of my price range for those shoes, I know there is someone out there willing to pay that.

  5. conoreiremba · ·

    I have never used StockX myself but this was a great insight. In fact, I have never felt strongly enough about shoes that I would be willing to spend hours on the sidewalk to get a pair either. The only thing I have done that for is to get tickets for the sport of hurling back home in Ireland. However, some of our classmates have definitely raised the collective standards for footwear in class recently, I think it has provided the l motivation I need to up my own shoe game, and StockX seems like the perfect place to start.
    I had no idea that people were collecting footwear as a way of an investment but when you consider a pair o prototype Nikes that Kanye Wore in 2008 were just sold at an auction for $1.8 billion it makes perfect sense. (https://www.nbcnews.com/news/us-news/kanye-west-sneakers-fetch-record-1-8-million-private-sale-n1265358?utm_source=morning_brew)
    In echoing Abigail’s point, I think it is very hard to agree on a valuation for a given pair though, and it very much depends on the individual but I like how StockX takes some of this guesswork out by its use of efficient pricing through free-market supply and demand dynamics.
    I do agree with you that StockX will continue to expand. As we have seen with so many items of clothing, if you hold onto them for long enough they’ll eventually come back into fashion (I’m still holding out hope for some items in my wardrobe), and you could argue that it’s especially true with shoes. Great post again; stocks, cars, VR, shoes, you certainly know how to mix it up.

  6. I read Curtis Jacksons (aka 50-cent) book “Hustle Harder, Hustle Smarter” (actually surprisingly good). He tried to get his son to go into business with him on a similar venture. Curtis new it could be a huge business, but his son never stepped up.

  7. olivia_levy8 · ·

    I really enjoyed learning more about the resell industry since for years a family friend of mine basically made a living by reselling sneakers. I could never fully understand how the business was so lucrative, but this blog definitely showed how he was so successful. I have seen the lines around the block for the latest drop and can totally see why buying for a markup price through StockX is worth it. Thanks for sharing, if I ever need a rare pair of sneakers now I know where to go!

  8. williammooremba · ·

    Awesome blog post. One thing that stuck out was you mentioning StockX users look at sneakers like a tradeable asset versus clothing. I wonder if we will end up at a point where sneakers start changing hands without every moving the physical asset. If you’re only going to resell it later anyway, it probably makes sense to just keep it in a StockX warehouse. I understand a lot of the appeal is to show off a collection, but you could just have your favorites with you and keep at least a portion of the collection offsite that could be convenient for super serious collectors. It also could start to allow for fractional ownership if a particular sneaker pair becomes prohibitively expensive to own outright

  9. Scott Siegler · ·

    Great post Erin! This is such a good idea for a business. Something that has always been interesting to me is how sneaker brands have traditionally catered their marketing and releases to the lifestyles of sneakerheads – timing releases around the same time as pay day and releasing small batches that they know will sell out quickly to ratchet up the hysteria. I’ve been wearing AF1s for five consecutive years now, and finding a new pair at a reasonable price when I need one is always an adventure. I wonder how this site is now disrupting how sneaker brands have traditionally been promoting and releasing new product.

  10. changliu0601 · ·

    Interesting Post!I bought sneakers from StockX and sold things in StockX as well. The price in Stock X is not good. If I had other options to get the sneakers I want, I would not go Stock X.But i have to say selling things like supreme clothing in Stock X is much faster than other platforms.A friend of mine has his business to resell the sneakers. He bought robotics to get the new released sneakers, wait the price get up and sell it in Stock X.This makes the price of many popular shoes unacceptable.Stock X has become to a platform to make you access to the sneaker you like but in crazy price.

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